CSRS & FERS Disability Retirement: Interaction with OWCP/DOL

Last Updated on August 6, 2009 by Federal Disability Lawyer

I receive calls periodically as to whether it is of greater advantage to remain on Worker’s Comp (Department of Labor, Office of Workers Compensation Program — “OWCP”) as opposed to going out on OPM Disability Retirement.  My answer remains the same:  OWCP is not a retirement system; OPM disability retirement is indeed that — it is a retirement, where one is separated from Federal Service, and you go out and do what you want to with your life.  Every decision has consequences; every act which we engage in has inherent residual effects, and we have to balance such effects and consequences.  Thus, while OWCP benefits pay a higher rate (75% tax free with a dependent; 66 2/3% tax free without a dependent), there are restrictions:  You must comply with any and all requests (or demands) of the Department of Labor; you cannot go out and get another job, or start another career — because you are deemed “disabled” and are being paid for it.  On the other hand, OPM disability retirement pays less (for FERS, 60% the first year, 40% every year thereafter), but you have the freedom of retirement — you may go out and start another career, and make up to 80% of what your former position currently pays, without losing your disability annuity.  These — and many other factors — are some things to consider when weighing the differences between OPM disability retirement, and receiving OWCP/DOL benefits.


Robert R. McGill, Esquire

One thought on “CSRS & FERS Disability Retirement: Interaction with OWCP/DOL

  1. Question: Initially I was injured on the job….filed my owcp claim and was denied, at the same time I was a FF/EMT and the dr said I could not perform that duty…so awaiting a an apeal on owcp I filed for OPM disability…I won that(I did not receive $$ from OPM) and a week later OWCP called and said my case was excepted..so I opted for Comp….I went back to work(fed) at a lower pay and was compensated for wage loss by OWCP…years went by and my health deterioted…I was told to file again for disability ret., which I did..and left work..after a year waiting and living on just the wage differential I received a answer from OPM…they said to I have to resign from Federal service in order for my retirement(original) to be activated, giving up my OWCPdifferential pay. My concern is that if I resign, will I forfeit OWCP obligation to me..ie: future medical for injury, possible scheduled award, etc?? My CPO said I could put comment to be added to the SF50 form”stating that I am resigning to Elect my Retirement in lieu of Comp payments, and that I am not reliquishing OWCP obligation by this resignation request”…IS THIS SAFE TO DO??

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